When a client needs financial support during a pending case, the funding agreement can affect more than immediate cash flow. Ohio attorneys must also consider disclosure requirements, cancellation rights, and whether the structure protects the client’s recovery. If you are evaluating an option, Contact Us to discuss an attorney-aligned approach before recommending funding.

That distinction matters when reviewing an agreement with a client. A careful analysis starts with the rules Ohio currently applies, the information a contract must present. And the protections a client should be able to understand before accepting funds.

What Ohio Litigation Funding Laws Require Today

Answer capsule: Ohio litigation funding laws currently regulate non-recourse civil litigation advances through Ohio Revised Code Section 1349.55. The statute focuses on transparent contract disclosures and gives consumers a short period to cancel after receiving funds. Attorneys should distinguish these current requirements from proposed changes in House Bill 105.

Section 1349.55 defines a non-recourse civil litigation advance as a payment made to a consumer with a pending civil claim in exchange for a right to receive money from a realized settlement. Judgment, award, or verdict. Because repayment depends on proceeds from the case, the contract must make the financial terms understandable before the client commits. For a broader practical review, see these litigation funding disclosure rules.

What must an Ohio funding contract disclose?

The contract must be completely filled in and place required disclosures on its front page in at least 12-point bold type. Those disclosures include the total amount advanced, an itemization of one-time fees. The total amount the consumer would repay at six-month intervals for 36 months, including fees, and the annual percentage rate of return. This repayment schedule helps a client and attorney evaluate the financial effect of the agreement over time rather than relying only on the initial advance.

Ohio law also requires the contract to provide a cancellation right. A consumer may cancel within five business days after receiving the funds, without penalty or further obligation, if the statutory procedures for returning the money are followed. Attorneys reviewing an agreement should confirm that this right is stated clearly and that the client understands how to exercise it.

HB 105 is a proposed legislative change, not a substitute for checking the law currently in effect. Until the framework changes, attorneys should assess whether each agreement satisfies Section 1349.55 and explain its disclosures, repayment schedule, APR, and cancellation process to the client.

Sources: Ohio Revised Code Section 1349.55 and Ohio House Bill 105.

How House Bill 105 Will Change Ohio Litigation Funding Laws

House Bill 105 would replace Ohio’s current framework for non-recourse litigation funding with a more detailed set of requirements. The proposal would add registration, stronger cancellation and fee protections, and a clearer distinction between consumer agreements and larger commercial financing arrangements. Because the bill’s status and effective date can change, attorneys should confirm the current text and implementation details through the Ohio General Assembly.

1. Replace the current statute. HB 105 would repeal Ohio Revised Code Section 1349.55 and enact Sections 1357.01 through 1357.08. This would move Ohio litigation funding laws into a new statutory structure addressing non-recourse litigation funding agreements and related business practices. The proposed legislation identifies the new sections and repeal in its official bill description.
2. Require funder registration. Consumer legal funding companies and commercial litigation financiers would generally need to register with the Ohio Attorney General before doing business in Ohio. The registration process would include disclosures about company leadership and affiliations, giving regulators and attorneys more information about the entities offering funding.
3. Extend the cancellation period. Under current Section 1349.55, a consumer generally has five business days after receiving funds to cancel without penalty or further obligation, subject to the statute’s return procedures. HB 105 would extend that period to 10 days. That additional time would give clients a broader opportunity to review the agreement with counsel and reconsider the transaction.
4. Limit service fees. The bill would cap service fees associated with covered funding agreements. A cap can make the total cost easier to evaluate, but attorneys should still review how the agreement calculates repayment. When fees accrue, and whether other permitted charges affect the client’s eventual obligation.
5. Ban prepayment penalties. HB 105 would prohibit penalties imposed solely because a funded client pays the agreement early. This protection matters when a case resolves sooner than expected, because the client should not face an extra charge simply for satisfying the funding obligation ahead of schedule.
6. Apply consumer-protection rules. The proposal would regulate covered litigation funding under the Ohio Consumer Sales Practices Act. It distinguishes consumer agreements as arrangements that create a contingent right to receive an amount of potential proceeds and involve a cash payment under $400,000. Larger or differently structured transactions may require separate analysis, so attorneys should not assume every funding arrangement receives identical treatment.

For Ohio practitioners, the practical takeaway is to treat HB 105 as a proposed compliance framework. Not a substitute for checking the law in force when a client considers funding. Review the provider’s registration, fee disclosures, cancellation language, and agreement structure before recommending or facilitating a transaction.

What Ohio’s New Rules Mean for Plaintiffs and Their Attorneys

Answer: Ohio’s evolving rules make careful review of funding terms part of responsible client counseling. Attorneys should help clients compare the total repayment obligation, cancellation rights, and effect of the agreement on settlement decisions, not simply ask whether money is available.

For plaintiff attorneys, the practical issue is whether a proposed advance supports the client’s interests without creating avoidable financial pressure. A funding agreement should be reviewed alongside the client’s litigation timeline, expected recovery, medical and living expenses, and realistic settlement options. If repayment terms could materially influence a client’s willingness to accept an offer, that risk deserves a clear conversation and appropriate documentation.

Evaluate the offer, not just the approval decision

Ohio law requires specific disclosures for covered non-recourse civil litigation advances, including the amount advanced. Itemized fees, repayment amounts at six-month intervals for 36 months, and the annual percentage rate. The Ohio Revised Code also provides a five-business-day cancellation right after the consumer receives funds, subject to the contract’s required procedures. Attorneys can use those requirements as a minimum review checklist, while still asking whether the economics are understandable and fair in the client’s circumstances. Review the current Ohio statutory disclosures.

Protect the client’s decision-making

Disclosure is not merely a paperwork exercise. Explain whether interest is simple or compound, when repayment is calculated, what happens if the case is lost, and whether any fees can increase the balance. The goal is to ensure the client understands the agreement and retains meaningful control over settlement decisions. Transparent terms can help prevent a client from feeling forced to accept an unfair settlement simply because expenses have become urgent.

The Milestone Foundation’s model is designed around that attorney-aligned standard. It is a 501(c)(3) nonprofit that offers 15% simple annual interest for pre-settlement funding and 10% simple interest for post-settlement funding. Interest never compounds, funding is non-recourse, and there are no hidden fees. Learn more about ethical consumer litigation funding and use the attorney checklist for litigation funding when reviewing an option with a client.

Why a Nonprofit Alternative Aligns with Ohio’s Regulatory Goals

Ohio’s consumer-protection framework emphasizes clarity, informed decisions, and fair treatment in non-recourse civil litigation advances. The Milestone Foundation supports those goals through a mission-driven model: it is the United States’ first and only 501(c)(3) nonprofit consumer litigation funding organization. For attorneys evaluating Ohio litigation funding laws in practice, the funding partner’s structure matters alongside the contract’s disclosures.

For attorneys: Review litigation funding disclosure rules before recommending any advance, and compare the actual repayment burden rather than relying on an advertised rate.

Why simple interest protects the client’s recovery

Simple interest applies to the agreed principal without adding prior interest back into the balance. That distinction gives counsel a clearer way to explain potential repayment and assess whether funding is proportionate to the client’s needs. Because the Foundation’s funding is non-recourse, the plaintiff does not owe repayment if the case loses, while attorney participation remains required for a plaintiff funding application.

Attorneys who want a deeper comparison can read comparing litigation funding companies beyond advertised rates. The relevant question is not simply whether a provider operates within Ohio’s rules, but whether its terms support the client-protection principles those rules seek to advance.

Partners for Justice and fiduciary-minded practice

The Foundation’s Partners for Justice membership program gives attorneys another way to engage with an ethical funding model. Private practice firms can join for a minimum of $99 per month, while membership is free for nonprofit, public interest, and legal aid attorneys. The program helps participating firms identify funding options that are transparent and consistent with a fiduciary-minded approach to client representation.

A Practical Guide for Ohio Attorneys Evaluating Litigation Funding

When reviewing an advance for a client, treat the funding agreement as part of the client-protection analysis, not as a routine administrative document. This attorney checklist for litigation funding can help you compare legal compliance, repayment risk, and alignment with the client’s interests.

1. Verify registration. Confirm that the provider is authorized under the current Ohio framework, and separately check the status and effective requirements of House Bill 105. Ohio’s existing law regulates non-recourse civil litigation advances under Ohio Revised Code Section 1349.55. Because HB 105 proposes new sections and repeal of Section 1349.55, avoid relying on outdated summaries or marketing claims. Review the current statute and legislative record at the Ohio Revised Code and the Ohio Legislature.
2. Evaluate interest structure. Identify whether the agreement uses simple interest, compounding interest, fees, or a combination. Ask for repayment examples at realistic intervals, including a delayed resolution. A transparent structure should make the client’s potential repayment easy to understand before signing.
3. Check cancellation terms. Confirm the client’s cancellation window, the procedure for returning funds, and whether the agreement imposes any prepayment penalty. Under current Section 1349.55, consumers have a five-business-day cancellation right after receiving funds, subject to the statute’s procedures. Do not assume a longer or different right applies unless the current agreement and law support it.
4. Review disclosures. Make sure the agreement clearly states the amount advanced, itemized one-time fees, repayment amounts at six-month intervals for 36 months, and the annual percentage rate. Section 1349.55 requires these disclosures on the front page in at least 12-point bold type. For a broader review, see the Foundation’s guide to litigation funding disclosure rules.
5. Consider nonprofit alternatives. Compare whether the provider’s model puts the client’s interests first and reduces pressure to accept an unfair settlement. The Milestone Foundation is a 501(c)(3) nonprofit offering non-recourse funding with simple interest that never compounds, alongside transparent, attorney-aligned practices. Compare the full repayment burden, not just the advertised rate.
6. Document your recommendation. Record the options reviewed, material terms explained, client questions, and reasons for recommending or declining a particular provider. A concise written analysis helps demonstrate that you considered the client’s interests, informed consent, and applicable fiduciary responsibilities. Attorneys seeking an ongoing ethical funding resource can review the membership program for attorneys.

Frequently Asked Questions

What does Ohio law currently require in a litigation funding agreement?

Section 1349.55 of the Ohio Revised Code regulates non-recourse civil litigation advances. The agreement must disclose the amount advanced, itemized one-time fees. The total repayment amount at six-month intervals for 36 months, and the annual percentage rate in the required format. Read the Ohio statute.

Can an Ohio consumer cancel a litigation funding agreement?

Yes. Under current Section 1349.55, a consumer may cancel within five business days after receiving the funds without penalty or further obligation. Provided the consumer follows the contract’s procedures for returning the money. Attorneys should review the agreement carefully so clients understand this right before accepting an advance. Ohio Revised Code Section 1349.55.

Has House Bill 105 changed Ohio litigation funding laws?

House Bill 105 is proposed legislation in Ohio’s 136th General Assembly. Its text would create new sections governing non-recourse litigation funding and repeal Section 1349.55. So attorneys should confirm the bill’s current status and effective date before relying on proposed requirements. Check the Ohio Legislature’s HB 105 record.

What should plaintiff attorneys evaluate before recommending funding?

Review the client’s recovery obligations, every fee and repayment scenario, cancellation terms, and whether the arrangement could affect settlement decisions. A transparent option should use simple interest that never compounds, remain non-recourse if the plaintiff loses. And support the attorney’s duty to protect the client’s interests rather than create pressure to settle prematurely.

Ready to support your Ohio clients with ethical funding?

Attorneys who want a transparent, client-centered approach can explore how fair litigation funding may help clients manage essential expenses without pressure to accept an unfair settlement. Join the Partners for Justice membership program to learn how your firm can connect with an attorney-aligned nonprofit funding resource.